Article 354 of the Indian Constitution

Article 354 of the Indian Constitution deals with the application of provisions related to the distribution of revenues while a Proclamation of Emergency is in operation. This article outlines the conditions under which the distribution of revenues between the Union and the States can be altered during a state of emergency.

It also outlines the procedure for making such changes and the duration for which they can remain in effect.

Adding to that, it also makes sure that the President’s decision is reviewed and makes it mandatory to lay it before the House of Parliament.

Background of Article 354 Of The Indian Constitution

Article 277 of the Draft Constitution of India, 1948 stated:

The President may, while a Proclamation of Emergency is in operation, by order, direct that all or any of the provisions of articles 249 to 259 of this Constitution shall for such period, not extending in any case beyond the expiration of the financial year in which such proclamation ceases to operate, as may be specified in the order, have effect subject to such exceptions or modifications as he thinks fit.

Draft Article 277, also known as Article 354 of the Indian Constitution, was discussed and debated in the Assembly on August 19th and 20th, 1949. This article empowers the President of India to temporarily modify the financial relationship between the Union (Central Government) and the States during a state of emergency. However, during the discussion, some members of the Assembly raised concerns about the potential consequences of this article on the States.

One concern that was raised was that the President could pass orders that may impact the States’ financial obligations and planned expenditures, potentially leading to financial hardship for the States. Additionally, some members were concerned about the wide powers and discretion given to the President under this article.

To address these concerns, a Draft Committee member reminded the Assembly that the President’s orders would be temporary and no permanent changes could be made to the fiscal relationship between the Union and the States. The Chairman of the Drafting Committee also reassured the Assembly that the President’s orders would be reasonable, measured, and appropriate for the prevailing circumstances.

Furthermore, the Drafting Committee Chairman proposed an amendment at the beginning of the debate that would require parliamentary approval for the President’s orders. He felt that it would not be wise to leave Union-State financial arrangements to the President’s discretion without any oversight by the Parliament. This amendment helped to alleviate the concerns of some members who felt that the Draft Article gave the President too much power.

In the end, the Assembly accepted the Chairman’s amendment and rejected other proposed amendments. Draft Article 277 was adopted with the amendment on August 20th, 1949.

Article 354 of the Indian Constitution

Article 354 of the Indian Constitution is an essential provision in the Constitution as it ensures that the government has the necessary financial resources to deal with an emergency situation, while also protecting the rights of the States. Let’s break down its clauses and understand the provisions better.

Clause 1 – As it is & Explained

(1) The President may, while a Proclamation of Emergency is in operation, by order direct that all or any of the provisions of articles 268 to 279 shall for such period, not extending in any case beyond the expiration of the financial year in which such Proclamation ceases to operate, as may be specified in the order, have effect subject to such exceptions or modifications as he thinks fit.

According to the first clause of Article 354 of the Indian Constitution, during a state of emergency, as declared by a Proclamation issued by the President of India, the President has the authority to temporarily alter certain aspects of the Indian Constitution related to the distribution of revenues between the Union (Central Government) and the States.

Specifically, the President may issue an order, directing that certain provisions, outlined in Articles 268 to 279 of the Indian Constitution, shall have effect subject to certain exceptions or modifications.

These modifications or exceptions can only be made for a specific period of time, and cannot extend beyond the expiration of the financial year in which the Proclamation of Emergency ceases to operate.

This provision gives the President the power to make necessary changes to the distribution of revenues between the Union and the States during an emergency situation, in order to ensure that the government has the necessary financial resources to deal with the emergency.

However, it also ensures that these changes are temporary, and cannot become permanent. Additionally, it also ensures that the rights of the States are protected and that there is proper oversight in place, by limiting the period of these modifications.

Clause 2 – As it is & Explained

(2) Every order made under clause (1) shall, as soon as may be after it is made, be laid before each House of Parliament.

Clause (2) of Article 354 of the Indian Constitution states that every order made by the President under Clause (1) shall be presented before both Houses of the Indian Parliament as soon as possible after it is made.

This means that any order issued by the President under Clause (1) of Article 354, which allows him to temporarily modify certain provisions related to the distribution of revenues between the Union and the States during a state of emergency, must be immediately presented before the Lok Sabha (the Lower House of the Indian Parliament) and the Rajya Sabha (the Upper House of the Indian Parliament) for review and approval.

This clause is an important aspect of the article as it ensures that there is parliamentary oversight of any changes made to the distribution of revenues during a state of emergency.

It allows for the elected representatives of the people to review and approve the changes made by the President and ensures that these changes are in the best interest of the nation and its citizens. It also ensures that the President’s discretion is not unfettered and any order made is not arbitrary.

This is an important provision in the Indian Constitution as it ensures that the government’s actions are transparent and accountable to the citizens it serves.

Conclusion

In conclusion, Article 354 of the Indian Constitution plays a vital role in ensuring that the government has the necessary financial resources to deal with an emergency situation, while also protecting the rights of the States.

This article empowers the President to temporarily modify certain provisions related to the distribution of revenues between the Union and the States during a state of emergency.

The provision gives the President the power to make necessary changes to the distribution of revenues between the Union and the States during an emergency situation, in order to ensure that the government has the necessary financial resources to deal with the emergency. However, it also ensures that these changes are temporary, and cannot become permanent.

At the same time, clause (2) of Article 354 of the Indian Constitution ensures that there is parliamentary oversight of any changes made to the distribution of revenues during a state of emergency, which allows for the elected representatives of the people to review and approve the changes made by the President and ensures that these changes are in the best interest of the nation and its citizens.

Overall, Article 354 of the Indian Constitution is an important aspect of the Indian Constitution, as it allows for necessary modifications to be made to the financial relationship between the Union and the States during a state of emergency, while also ensuring that the rights of the States are protected and that there is proper oversight in place.

Related Articles:

1. Article 268 Of The Indian Constitution
2. Article 269 of the Indian Constitution
3. Article 270 Of The Indian Constitution
4. Article 271 Of The Indian Constitution

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